1. Nature of Operations
Strontium Ferriten India Limited (SFIL) is a manufacturer of hard, soft
ferrites and magnets. SFIL has been producing high quality materials in
standard and non-standard core sizes and geometries.
2. Statement on Significant Accounting Policies
a) Basis of Preparation & Accounting Assumption
The financial statements have been prepared to comply in all material
respects with the mandatory Accounting Standards issued by the
Institute of Chartered Accountants of India and the relevant provisions
of the Companies Act, 1956. The accounts of the company have been
prepared under the historical cost convention on an accrual basis. The
accounts of the company have been pre-pared on a going concern
b) Changes in Accounting Policies
Previously Sales have been accounted exclusive of Excise Duty. Sales
have been accounted inclusive of Excise Duty for the current year. This
has been made to confirm to the guidelines issued by the Institute of
Chartered Accountants of India and is the general corporate practice.
d) Fixed Assets
Fixed Assets are accounted at cost of acquisition exclusive of CENVAT
and inclusive of freight inward, taxes, incidentals related to
acquisition and financial costs until commencement of commercial
e) Depreciation and Amortisation
i) Depreciation on original cost of fixed assets is provided on
Straight Line Method except tor vehicles, on which depreciation is
provided on Written Down Value Method at rates prescribed in Schedule
XIV of the Companies Act, 1956. Depreciation on assets whose actual
cost did not exceed five thousand rupees, has been provided at the rate
of hundred percent.
II) Preliminary Expenses are being amortized in tan equal installments
over a period of ten years commencing from 1998-99 and ending in
I) Raw Materials, Consumable Stores and Spares : At Cost
ii) Work In Process : At Estimated Cost (cost of raw materials and
other variable cost)
iii) Finished Goods : At lower of cost or net realizable value
g) Purchases & Sates
i) Cost of Raw Materials and other inputs have been recorded exclusive
of CENVAT credit receivable.
il) Sales have been stated inclusive of Excise Duty but exclusive of
h) Retirement & Other benefits to employees
Provident Fund Contribution in respect of eligible employees is
provided tor and funded. Gratuity, for eligible employees has been
provided on cash basis. The Company provides tor Leave Encashment as
i) Taxes on Income
As per the Accounting Standard 22, issued by the Institute of Chartered
Accountants of India, the tax effect on the differences between
taxable income and accounting income for a period that originate in one
period and are capable of reversal on one or more subsequent periods
are to be recognized and disclosed in the Financial Statements.
Accordingly the Deferred Tax Assets and Liabilities for the year under
review have been recognized.
3. Term Loan from Andhra Pradesh State Financial Corporation is secured
by way of mortgage of all immovable properties both present and future
and hypothecation of all movable assets along with personal
guarantees of Director Mr.K.Ranganathan and Managing Director
4. Unsecured Loan/Sales Tax Deferment
(a) Interest free Sales Tax Loan of Rs.371,867 (Rs.357,634/- previous
year) received from Government of Andhra Pradesh is repayable at the
end of 14 years.
(b) Unsecured Loan of Rs.10,38,571/- constitutes sales tax deferred
liability. (Prv. year Rs.666,704/-) (Incentive granted by Govt. of
5. Balances of Sundry Debtors/Creditors and other loans and advances
given and taken, require confirmation.
6. Outstanding exceeding Rs.1 lac, due for payment for more than 30
days to any small-scale undertaking - Nil.